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The Latest New ETF Launches: The First ETF That Pays You To Invest Is (Almost) Here!

The ETF marketplace has been trending towards lower and lower fees for some time now, but it’s never gotten as low as it has this past week. Most watchers figured that a 0% ETF was the next logical step in the fee war, but Salt Financial has passed that marker and gone straight into negative territory. It’s the first ETF that will actually pay you to invest in it but it comes with a catch!

For a list of all new ETF launches, take a look at our ETF Launch Center.

Here are the latest new fund launches:

Ticker Name Issuer Launch Date ETFdb.com Category Expense Ratio
(BBSA n/a) JPMorgan BetaBuilders 1-5 Year U.S. Aggregate Bond ETF J.P. Morgan 03/12/2019 Treasuries 0.05%
(BBUS n/a) JPMorgan BetaBuilders U.S. Equity ETF J.P. Morgan 03/12/2019 Large Cap Growth Equities 0.02%
(JHCS n/a) John Hancock Multifactor Media and Communications ETF John Hancock 03/12/2019 Large Cap Growth Equities 0.40%
(LSLT n/a) Salt Low truBeta US Market ETF Salt Financial 03/12/2019 Large Cap Growth Equities 0.29%
(RYZZ n/a) RYZZ Managed Futures Strategy Plus ETF RYZZ Capital Management 03/14/2019 Alternatives 0.99%
(DMRE n/a) DeltaShares S&P EM 100 & Managed Risk ETF Transamerica Asset Management 03/19/2019 Large Cap Blend Equities 0.60%
(DYNF n/a) BlackRock U.S. Equity Factor Rotation ETF iShares 03/19/2019 Large Cap Growth Equities 0.30%
(FOVL n/a) iShares Focused Value Factor ETF iShares 03/19/2019 All Cap Equities 0.25%
(HOMZ n/a) Hoya Capital Housing ETF Hoya Capital Real Estate 03/20/2019 Real Estate Equities 0.45%

Salt Persues the First Negative Fee ETF

Of all the fund companies that were expected to challenge to debut the first free ETF, Salt Financial probably wasn’t anywhere near the top of the list. But the Salt Low truBeta U.S. Market Index ETF (LSLT n/a) made it to the magic mark first. The fund will use its proprietary truBeta system to target low beta stocks with stability in maintaining their low beta status.

The fund currently has an expense ratio of -0.05% but it’s only temporary. The negative fee level will only be effective through April 30, 2020 and will be capped at the first $100 million in assets. After that time, LSLT will revert back to its stated expense ratio of 0.29%. While that number isn’t as enticing as -0.05%, it’s still one of the lower expense ratios in the low volatility ETF space.

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Of all the fund companies that were expected to challenge to debut the first free ETF, Salt Financial probably wasn’t anywhere near the top of the list. But the Salt Low truBeta U.S. Market Index ETF (LSLT n/a) made it to the magic mark first. The fund will use its proprietary truBeta system to target low beta stocks with stability in maintaining their low beta status.

The fund currently has an application with the SEC to change its expense ratio to -0.05%, but that will only be temporary. The negative fee level will only be effective through April 30, 2020 and will be capped at the first $100 million in assets. After that time, LSLT will revert back to its current expense ratio of 0.29%. While that number isn’t as enticing as -0.05%, it’s still one of the lower expense ratios in the low volatility ETF space.

J.P. Morgan Challenges for Cheapest Again

J.P. Morgan has worked to continue undercutting the competition on cost. Not only has it very successfully lowered the bar, it’s become a top 10 ETF issuer in the process. The JPMorgan BetaBuilders 1-5 Year U.S. Aggregate Bond ETF (BBSA n/a) will charge just 0.05% making it nearly the cheapest ETF in the fixed income space. It will track the Bloomberg Barclays Short-Term U.S. Aggregate Bond Index, the short-term version of the index that tracks the iShares Core U.S. Aggregate Bond ETF (AGG A+).

The JPMorgan BetaBuilders U.S. Equity ETF (BBUS n/a) becomes the cheapest retail equity ETF on the market (once LSLT’s fee waiver expires) at just 0.02%. It will track a fairly vanilla index of large- and mid-caps stocks from U.S.-based companies.

BlackRock Debuts a Pair of Factor Equity Funds

BlackRock expands its factor-based investment product lineup with the introduction of two new ETFs. The BlackRock U.S. Equity Factor Rotation ETF (DYNF n/a) is an actively-managed fund that exhibits positive characteristics within at least one of the five major factors – size, quality, momentum, value and low volatility. It currently has more than 600 individual holdings and is heavily invested in the tech and healthcare sectors.

The iShares Focused Value Factor ETF (FOVL n/a) will offer largely what the fund’s name suggests. It will focus on roughly 40 different large- and mid-cap names that exhibit strong value characteristics using metrics, such as price-to-earnings, price-to-book and price-to-cash flows.

John Hancock Targets The Communications Sector

The John Hancock Multifactor Media and Communications ETF (JHCS n/a) becomes the latest sector-based fund in the company’s multifactor lineup joining existing ETFs representing nine other major sectors. It will companies within the broader communication services sector that demonstrate some combination of good value, smaller size and strong profitability.

...While Hoya Capital’s First ETF Focuses on the Housing Market

Real estate ETFs have been heading straight up for much of 2019, so it may be an ideal time for the launch of the Hoya Capital Housing 100 ETF (HOMZ n/a). The fund is designed to invest in companies with exposure to all segments of the U.S. housing market. It will dedicate portions of the overall portfolio to residential REITs, homebuilders, home improvement retailers, home furnishing makers, mortgage lenders and mortgage insurance providers. HOMZ plans to equal-weight 100 components to make up the overall portfolio.

Two More New Launches

The RYZZ Managed Futures Strategy Plus ETF (RYZZ n/a) uses a long/short strategy that will generally hold long equity positions and complement those with a variety of offensive and defensive futures positions that will vary depending upon the market environment. The DeltaShares S&P EM 100 & Managed Risk ETF (DMRE n/a) will invest in a combination of emerging markets equities, intermediate-term Treasury notes and T-bills with the goal of oth managing overall and limiting losses from the index’s equity exposure due to severe sustained market declines.

The Bottom Line

The ETF marketplace has been trending slowly and steadily towards lower expense ratios, but this month it’s really put its foot on the gas. BBUS and LSLT, which launched on the same day, become the two cheapest retail ETFs (at least for the time being) and set a new standard for low-cost. The rest of the new ETF roster is a diverse array of strategies. Two of the ETFs, RYZZ and DYNF, are actively-managed suggesting that the fund’s managers believe there is an opportunity for outperformance through security selection.

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